Tencent Scores Profit Gain on Mobile Gaming

Tencent Holdings Ltd. reported a 47% rise in net profit for the second quarter that beat analysts' expectations, as the Chinese internet giant's revenue from mobile games more than doubled.

The social-networking company, which operates the WeChat mobile messaging application, said Wednesday its net profit for the three months ended June 30 rose to 10.73 billion yuan ($1.61 billion) from 7.31 billion yuan a year earlier. Revenue rose 52% to 35.69 billion yuan from 23.43 billion yuan a year earlier.

The results came in well above analysts' predictions. Nine analysts polled by Thomson Reuters had expected a 34% rise in net profit and a 42% increase in revenue for the quarter.

Tencent generates more than half of its revenue from games distributed through its two major social platforms—WeChat and another messaging app, QQ—and its own app store. In the second quarter, its revenue from smartphone games more than doubled to 9.6 billion yuan from 4.5 billion yuan a year earlier, the company said.

Over the past year, Tencent has also been increasing its revenue from ads, including those displayed on WeChat's timeline page, similar to Facebook Inc.'s sponsored posts.

In the second quarter, the Chinese company's ad revenue rose 60% to 6.53 billion yuan.

Tencent's WeChat and QQ play crucial roles by generating traffic for moneymaking operations such as games and advertising. As of June, WeChat had 806 million world-wide monthly active users, up from 762 million in March, the company said. Users of QQ's mobile app increased slightly to 667 million from 658 million.

Write to Juro Osawa at juro.osawa@wsj.com

(END) Dow Jones Newswires

August 17, 2016 06:35 ET (10:35 GMT)

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